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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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EQUITY OFFICE PROPERTIES TRUST
(Exact name of registrant as specified in its governing instrument)
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MARYLAND 36-4151656
(State of Organization) (I.R.S. Employer Identification Number)
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TWO NORTH RIVERSIDE PLAZA, SUITE 2200
CHICAGO, ILLINOIS 60606
(Address of principal executive offices)
STANLEY M. STEVENS
CHIEF LEGAL COUNSEL
TWO NORTH RIVERSIDE PLAZA, SUITE 2200
CHICAGO, ILLINOIS 60606
(312) 466-3300
(Name, address and telephone number of agent for service)
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Copies to:
J. WARREN GORRELL, JR.
JAMES E. SHOWEN
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
(202) 637-5600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF CLASS AMOUNT TO BE AGGREGATE PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES BEING REGISTERED REGISTERED COMMON SHARE(1) PRICE(1) REGISTRATION FEE(1)
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Common Shares of Beneficial Interest, 137,427 $24.4065 $3,354,112 $932
$.01 par value per share...........
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(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) based on the average of the high and low
reported sales prices on the New York Stock Exchange on December 21, 1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION. THIS PROSPECTUS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF
AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE SUCH OFFER OR SALE
IS UNLAWFUL.
SUBJECT TO COMPLETION, DATED DECEMBER 23, 1998.
137,427 SHARES
EQUITY OFFICE PROPERTIES TRUST
COMMON SHARES OF BENEFICIAL INTEREST
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We may issue from time to time up to 137,427 common shares of beneficial
interest to holders of up to 137,427 Class A units of limited partnership
interest in EOP Operating Limited Partnership upon tender of such units for
redemption. Equity Office is the managing general partner of EOP Operating and
owns approximately 90.1% of the units.
The 137,427 units that may be redeemed were issued in connection with our
acquisition of certain assets and pursuant to a certain investment agreement to
which EOP Operating and the holders of the 137,427 units are parties. We are
required to register the 137,427 common shares pursuant to a registration rights
agreement with the holders of the units.
We will acquire units from the redeeming unit holders in exchange for any
common shares that we issue. We are registering the issuance of the common
shares to permit the holders thereof to sell them without restriction in the
open market or otherwise, but the registration of the common shares does not
necessarily mean that any holders will elect to redeem their units. Also, upon
any redemption, we may elect to pay cash for the units tendered rather than
common shares. Although we will incur expenses in connection with the
registration of the 137,427 common shares, we will not receive any cash proceeds
upon their issuance.
The common shares are listed on the New York Stock Exchange under the
symbol "EOP."
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMMON SHARES, INCLUDING SPECIAL CONSIDERATIONS APPLICABLE TO
REDEEMING UNIT HOLDERS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is .
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TABLE OF CONTENTS
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Summary............................... 2
The Company......................... 2
Securities to be Offered............ 2
Summary Risk Factors................ 2
Risk Factors.......................... 3
Special Considerations Applicable to
Redeeming Unit Holders........... 3
About This Prospectus................. 3
Where You Can Find More Information... 3
Special Note Regarding Forward-Looking
Statements.......................... 4
The Company........................... 5
Securities to be Offered.............. 5
Redemption of Units................... 5
Tax Consequences of Redemption...... 6
Comparison of Ownership of Units and
Common Shares.................... 7
EOP Operating -- Equity Office........ 8
Form of Organization and Assets
Owned............................ 8
Additional Equity................... 8
Borrowing Policies.................. 8
Management Control.................. 8
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Fiduciary Duties.................... 9
Management Liability and
Indemnification.................. 9
Anti-takeover Provisions............ 10
Voting Rights....................... 10
Amendment of the Partnership
Agreement or the Declaration of
Trust............................ 11
Vote Required to Dissolve EOP
Operating or Equity Office....... 11
Vote Required to Sell Assets........ 11
Vote Required to Merge.............. 11
Liability of Investors.............. 12
Review of Investor Lists............ 12
Units -- Shares of Beneficial
Interest............................ 12
Distributions....................... 12
Liquidity........................... 13
Taxation............................ 13
Federal Income Tax Considerations..... 15
Plan of Distribution.................. 15
Experts............................... 15
Legal Matters......................... 15
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in this prospectus. As used herein, "Equity
Office" means Equity Office Properties Trust, a Maryland real estate investment
trust, and one or more of its subsidiaries, including EOP Operating Limited
Partnership, and the predecessors thereof or, as the context may require, Equity
Office Properties Trust only or EOP Operating only. All references to the
historical activities of Equity Office prior to July 11, 1997, refer to the
activities of the Equity Office predecessors.
THE COMPANY
Equity Office was formed to continue and expand the national office
property business organized by Samuel Zell, our Chairman of the Board. Equity
Office, a self-managed real estate investment trust, is the managing general
partner of, and controls a majority of the limited partnership interests in, EOP
Operating. Equity Office owns all of its assets and conducts substantially all
of its business through EOP Operating and its subsidiaries.
Our principal executive offices are located at Two North Riverside Plaza,
Suite 2200, Chicago, Illinois 60606, and our telephone number is (312) 466-3300.
SECURITIES TO BE OFFERED
This prospectus relates to the possible issuance from time to time by
Equity Office of up to 137,427 common shares, if and to the extent that we elect
to issue such common shares to the holders of up to 137,427 units in EOP
Operating, upon the tender of such units for redemption. We will not receive any
cash proceeds from the issuance of the common shares, but will acquire units in
EOP Operating in exchange for any common shares that we issue.
Pursuant to EOP Operating's partnership agreement, each unit may be
tendered for redemption for cash equal to the fair market value of a common
share at the time of the redemption. Equity Office has the right to elect to
acquire directly any units tendered for redemption, rather than causing EOP
Operating to redeem such units for cash. We generally expect that we will elect
to acquire units tendered for redemption and issue common shares in exchange
therefor rather than paying cash, although we will make the determination
whether to pay cash or issue common shares at the time units are tendered for
redemption. With each redemption, our interest in EOP Operating will increase.
SUMMARY RISK FACTORS
See "Risk Factors" for certain factors relevant to an investment in the
common shares, including special considerations applicable to redeeming unit
holders.
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RISK FACTORS
An investment in our common shares or the units of EOP Operating, which are
redeemable on a one-for-one basis for common shares or their cash equivalent,
involves various risks. Unit holders should carefully consider the following
material risks in conjunction with the other information contained in this
prospectus and incorporated herein by reference, including, without limitation,
the risks of an investment in Equity Office set forth under the caption "Item 1.
Business -- Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 1997, as amended, before making a determination to redeem units.
SPECIAL CONSIDERATIONS APPLICABLE TO REDEEMING UNIT HOLDERS
TAX CONSEQUENCES OF REDEMPTION OF UNITS. Your exercise of your unit
redemption right will be treated for tax purposes as a sale of the units you
redeem. Such a sale will be fully taxable to you in an amount equal to the cash
or the value of the common shares received in the exchange plus the amount of
EOP Operating's nonrecourse liabilities considered allocable to the redeemed
units at the time of the redemption. It is possible that the amount of gain you
will be required to recognize, or even the tax liability resulting from such
gain, could exceed the amount of cash or the value of the common shares you
receive upon such redemption. See "Redemption of Units -- Tax Consequences of
Redemption." In addition, because the price of common shares fluctuates, the
price you receive when you sell your common shares may not equal the value of
your units at the time of redemption.
POTENTIAL CHANGE IN INVESTMENT UPON REDEMPTION OF UNITS. If you exercise
your unit redemption right, we will determine whether you receive cash or common
shares in exchange for your units. If you receive common shares, you will become
a shareholder of Equity Office rather than a holder of units in EOP Operating.
Although an investment in common shares is substantially equivalent to an
investment in units in EOP Operating, there are some differences between
ownership of units and ownership of common shares. These differences include
form of organization, management structure, investor rights and federal income
tax consequences. These differences, some of which may be material to you, are
discussed in "Redemption of Units -- Comparison of Ownership of Units and Common
Shares."
ABOUT THIS PROSPECTUS
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3, of which this prospectus is a part, under the Securities
Act of 1933, with respect to the securities offered hereby. This prospectus does
not contain all of the information set forth in the registration statement,
certain portions of which we have omitted as permitted by the rules and
regulations of the Commission. Statements contained in this prospectus as to the
contents of any contract or other document are not necessarily complete. If the
Commission's rules and regulations require that such contract or document be
filed as an exhibit to the registration statement, we refer you to the copy of
such contract or document filed as an exhibit to the registration statement for
a complete description. For further information regarding Equity Office and the
securities, we refer you to the registration statement and such exhibits and
schedules which may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 and file annual, quarterly and special reports, proxy statements and
other information with the Commission. You may read and copy any materials we
file with the Commission at the Public Reference Room of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York
10048. You may obtain information on the
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operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. In addition, we file many of our documents electronically with
the Commission, and you may access those documents over the Internet. The
Commission maintains a "web site" that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission. The address is "http://www.sec.gov."
The common shares are listed on the NYSE under the symbol "EOP," our Series
A Preferred Shares are listed on the NYSE under the symbol "EOPprA," our Series
B Preferred Shares are listed on the NYSE under the symbol "EOPprB," and our
Series C Preferred Shares are listed on the NYSE under the symbol "EOPprC." You
can inspect any reports, proxy statements and other information we file with the
NYSE at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
The Commission allows us to "incorporate by reference" the information we
file with them in this prospectus. This helps us disclose certain information to
you by referring you to the documents we file. The information we incorporate by
reference is an important part of this prospectus. We incorporate by reference
each of the documents listed below.
a. Our Annual Report on Form 10-K for the year ended December 31, 1997, as
amended.
b. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998.
c. Our Current Report on Form 8-K/A, filed with the Commission on February
18, 1998 (amending our Current Report on Form 8-K filed with the
Commission on December 24, 1997), and our Current Reports on Form 8-K
filed with the Commission on June 30, 1998, July 10, 1998, September 3,
1998, September 30, 1998 and December 15, 1998.
d. Our Registration Statement on Form 8-A, which incorporates by reference
a description of the Common Shares from our Registration Statement on
Form S-11 (File No. 333-26629).
We also incorporate by reference any future filings we make under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until all of the common shares to
which this prospectus relates have been issued or the offering is terminated.
You should note than any of our future filings which are incorporated by
reference will automatically update and supersede the information in this
prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
prospectus is delivered upon written or oral request. Requests should be
directed to Equity Office Properties Trust, Two North Riverside Plaza, Suite
2200, Chicago, Illinois 60606, Attention: Diane Morefield (telephone number:
(312) 466-3300).
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in or incorporated by reference into this prospectus
and any accompanying prospectus supplement contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act. We intend the
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 27A of the Securities Act. These
forward-looking statements relate to, without limitation, future economic
performance, our plans and objectives for future operations and projections of
revenue and other financial items, and can be identified by the use of
forward-looking terminology such as "may," "will," "should," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. The cautionary statements
incorporated by reference from our Annual Report on Form 10-K under the caption
"Risk Factors" and other similar statements contained in this prospectus or any
accompanying prospectus supplement identify important factors with respect to
such forward-looking statements, including certain risks and uncertainties, that
could cause actual results to differ materially from those in such forward-
looking statements.
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THE COMPANY
GENERAL
Equity Office was formed to continue and expand the national office
property business organized by Samuel Zell, our Chairman of the Board. Equity
Office, a self-managed REIT, is the managing general partner of, and controls a
majority of the limited partnership interests in, EOP Operating. We own all of
our assets and conduct substantially all of our business through EOP Operating
and its subsidiaries.
Our principal executive offices are located at Two North Riverside Plaza,
Suite 2200, Chicago, Illinois 60606, and our telephone number is (312) 466-3300.
We maintain regional offices in Los Angeles, Denver, Houston, Chicago, Atlanta
and Washington, D.C.
SECURITIES TO BE OFFERED
This prospectus relates to the possible issuance from time to time by
Equity Office of up to 137,427 common shares if, and to the extent that, Equity
Office elects to issue such common shares to the holders of up to 137,427 units
in EOP Operating, upon the tender of such units for redemption. Equity Office
will not receive any cash proceeds from the issuance of the common shares but
will acquire units in EOP Operating in exchange for any common shares issued
upon redemption of units.
Pursuant to EOP Operating's partnership agreement, each unit may be
tendered for redemption for cash equal to the fair market value of a common
share at the time of the redemption. Equity Office has the right, however, to
elect to issue common shares in exchange for any units tendered for redemption.
We generally expect that we will issue common shares in exchange for units
tendered for redemption rather than paying cash, although we will make the
determination whether to pay cash or issue common shares at the time units are
tendered. With each redemption, our interest in EOP Operating will increase.
REDEMPTION OF UNITS
Generally, each limited partner of EOP Operating other than Equity Office
and certain of its affiliates has the right to require the redemption of its
units beginning on the first anniversary of the issuance of such units, or on
such earlier date as Equity Office designates. In addition, if Equity Office
intends to make an extraordinary distribution of cash or property to its
shareholders or effect a merger, a sale of all or substantially all of its
assets or any other similar extraordinary transaction, then each limited partner
may exercise its unit redemption right, regardless of the length of time it has
held its units, during the period commencing on the date Equity Office gives
notice of such intention and ending on the record date to determine shareholders
eligible to receive such distribution or to vote on such transaction or, if no
record date is applicable, at least twenty business days before the consummation
of such transaction. A limited partner may exercise its unit redemption right by
giving written notice to EOP Operating and Equity Office. The units specified in
such notice shall be redeemed on the tenth business date following the date on
which Equity Office receives the redemption notice or, in the case of the
exercise of a unit redemption right in connection with an extraordinary
transaction, the date on which EOP Operating and Equity Office receive the
redemption notice.
If Equity Office does not assume EOP Operating's obligation with respect to
a unit redemption right, a limited partner which exercises its unit redemption
right will receive cash from EOP Operating in an amount equal to the market
value of the units to be redeemed. The market value of a unit for this purpose
will be equal to the average of the closing price of one common share on the
NYSE for the ten trading days before the day on which the redemption notice was
given. If Equity Office elects to acquire units tendered by a limited partner
exercising the unit redemption right, Equity Office will either, at its option,
pay cash in the amount specified above or issue a number of common shares equal
to the number of units tendered for redemption, adjusted to take into account
prior share dividends or subdivision or combinations of common shares. Upon
exercise of the unit redemption right, the limited partner's right to receive
distributions on the units redeemed will cease. At least 1,000 units (or all
remaining units owned by the
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limited partner if less than 1,000 units) must be redeemed each time the unit
redemption right is exercised. No redemption or exchange can occur if delivery
of common shares therefor would be prohibited either under the provisions of
Equity Office's Declaration of Trust designed to protect Equity Office's REIT
qualification or under applicable federal or state securities laws. Equity
Office will at times reserve and keep available out of its authorized but
unissued common shares, solely for the purpose of effecting the issuance of
common shares pursuant to the unit redemption right, a sufficient number of
common shares as shall from time to time be sufficient for the redemption of all
outstanding units not owned by Equity Office.
TAX CONSEQUENCES OF REDEMPTION
The following discussion summarizes the material federal income tax
considerations that may be relevant to a limited partner who exercises his or
her redemption right.
Tax Treatment of Redemption of Units. If Equity Office assumes the
redemption obligation, the redemption will be treated as a sale of units by such
unit holder to Equity Office at the time of such redemption. Such sale will be
fully taxable to the redeeming unit holder in an amount equal to the cash or the
value of the common shares received in the exchange plus the amount of EOP
Operating's nonrecourse liabilities allocable to the redeemed units at the time
of the redemption. The determination of the amount of gain or loss is discussed
more fully below.
If Equity Office does not elect to assume the obligation to redeem units,
EOP Operating will redeem such units for cash. If EOP Operating redeems units
for cash that Equity Office contributes to EOP Operating to effect such
redemption, the redemption likely would be treated for tax purposes as a sale of
such units to Equity Office in a fully taxable transaction, although the matter
is not free from doubt. In that event, the redeeming unit holder would be
treated as realizing an amount equal to the cash received in the exchange plus
the amount of EOP Operating's nonrecourse liabilities allocable to the redeemed
units at the time of the redemption. The determination of the amount of gain or
loss in the event of sale treatment is discussed more fully below.
If EOP Operating redeems units for cash that is not contributed by Equity
Office to effect the redemption, the tax consequences would be the same as
described in the previous paragraph, except that if EOP Operating redeems less
than all of a unit holder's units, the unit holder would not be permitted to
recognize any loss occurring on the transaction and would recognize taxable gain
only to the extent that the cash, plus the share of EOP Operating's nonrecourse
liabilities allocable to the redeemed units, exceeded the unit holder's adjusted
basis in all of such unit holder's units immediately before the redemption.
Tax Treatment of Disposition of Units by Unit Holder Generally. If a unit
is redeemed in a manner that is treated as a sale of the unit, or a unit holder
otherwise disposes of a unit, the determination of gain or loss from the sale or
other disposition will be based on the difference between the amount considered
realized for tax purposes and the tax basis in such unit. See "-- Basis of
Units" below. Upon the sale of a unit, the "amount realized" will be measured by
the sum of the cash and fair market value of common shares or other property
received plus the portion of EOP Operating's liabilities allocable to the unit
sold. To the extent that the amount exceeds the unit holder's basis for the unit
disposed of, such unit holder will recognize gain. It is possible that the
amount of gain recognized or even the tax liability resulting from such gain
could exceed the amount of cash and the value of common shares or any other
property received upon such disposition.
Except as described below, any gain recognized upon a sale or other
disposition of units will be treated as gain attributable to the sale or
exchange of a capital asset. To the extent, however, that the amount realized
upon the sale of a unit attributable to a unit holder's share of "unrealized
receivables" of EOP Operating exceeds the basis attributable to those assets,
such excess will be treated as ordinary income. Unrealized receivables include,
to the extent not previously included in EOP Operating's income, any rights to
payment for services rendered or to be rendered. Unrealized receivables also
include amounts
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that would be subject to recapture as ordinary income if EOP Operating had sold
its assets at their fair market value at the time of the transfer of a unit.
The maximum rate of tax for individuals, trusts and estates on the net
capital gain from the sale or exchange of an asset held for more than 12 months
is 20%. Net capital gain from the sale of an asset held 12 months or less is
subject to tax at the applicable rate for ordinary income. The maximum rate for
net capital gains attributable to the sale of depreciable real property held for
more than 12 months is 25% to the extent of the prior depreciation deductions
not otherwise recaptured as ordinary income under the IRS's depreciation
recapture rules.
The IRS has authority to issue regulations that could, among other things,
apply these rates on a look-through basis in the case of "pass-through" entities
such as EOP Operating. The IRS has not yet issued such regulations, and if it
does not issue such regulations in the future, the rate of tax that would apply
to the disposition of a unit by an individual, trust or estate would depend on
whether such individual, trust or estate held such unit longer than 12 months.
The IRS could, however, issue regulations that would provide that the rate of
tax applicable to the disposition of a unit by an individual, trust or estate
would be determined based upon the nature of the assets of EOP Operating and the
periods of time over which EOP Operating held such assets. Such regulations
could be applied retroactively. If such regulations were to apply to the
disposition of a unit, any gain on such disposition would likely be treated
partly as gain from the sale of a long-term capital asset and partly as gain
from the sale of a short-term capital asset, and it also would be treated partly
as gain from the sale of depreciable real property.
Basis of Units. In general, a unit holder who received units in exchange
for contributing an interest in a partnership had an initial tax basis in such
units equal to his or her basis in the contributed partnership interest. A unit
holder's initial basis in his or her units generally is increased by the unit
holder's share of EOP Operating's taxable income and increases in his or her
share of the liabilities of EOP Operating, including any increase in his or her
share of nonrecourse liabilities. Generally, such unit holder's basis in his or
her units is decreased, but not below zero, by (i) his or her share of EOP
Operating's distributions, (ii) decreases in his or her share of liabilities of
EOP Operating, including nonrecourse liabilities, (iii) his or her share of
losses of EOP Operating, and (iv) his or her share of nondeductible expenditures
of EOP Operating that are not chargeable to capital accounts.
COMPARISON OF OWNERSHIP OF UNITS AND COMMON SHARES
An investment in Equity Office's common shares is substantially equivalent
economically to an investment in EOP Operating's units. A holder of a common
share receives the same distribution that a holder of a unit receives and
shareholders and unit holders generally share on an equivalent basis in the
risks and rewards of ownership in Equity Office. There are, however, some
differences between ownership of units and ownership of common shares, some of
which may be material to investors. The comparisons below are intended to assist
holders of units in understanding how their investment will be changed if their
units are redeemed for common shares.
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EOP OPERATING EQUITY OFFICE
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FORM OF ORGANIZATION AND ASSETS OWNED
EOP Operating is a Delaware limited Equity Office is a Maryland real estate
partnership. EOP Operating owns, directly and investment trust. Equity Office has elected
through subsidiaries, Equity Office's office to be taxed as a REIT under the Internal
buildings and other assets. EOP Operating is Revenue Code and intends to continue to meet
not permitted to take any action which could the requirements for qualification as a REIT.
adversely affect Equity Office's REIT status. Equity Office's only significant asset is its
interest in EOP Operating, which gives Equity
Office an indirect investment in the
properties owned by EOP Operating. Under EOP
Operating's partnership agreement, Equity
Office may not conduct any business other
than in connection with the ownership of
interests in, and management of the business
of, EOP Operating.
ADDITIONAL EQUITY
EOP Operating is authorized to issue units Equity Office's Board of Trustees may
and other partnership interests in one or authorize issuances from time to time of
more classes or series, with such shares of beneficial interest of any class or
designations, preferences and relative series, or securities or rights convertible
participating, optional or other special into shares, for such consideration as the
rights, powers and duties as determined by Board of Trustees determines.
Equity Office. EOP Operating may issue units
and other partnership interests to Equity
Office in exchange for the proceeds raised by
an Equity Office offering of comparable
shares.
BORROWING POLICIES
EOP Operating has no restrictions on EOP Operating's partnership agreement
borrowings, and Equity Office is authorized prohibits Equity Office from incurring debt
to borrow money on behalf of EOP Operating. unless it lends the net proceeds to EOP
Equity Office has adopted a policy of Operating. Equity Office has a policy that it
incurring debt, either directly or through will not incur indebtedness other than
EOP Operating, only if upon such incurrence short-term trade, employee compensation,
Equity Office's debt to market capitalization distributions payable or similar indebtedness
ratio would be approximately 50% or less, but that will be paid in the ordinary course of
this policy may be altered at any time by the business. Indebtedness to fund acquisitions
Board of Trustees. and other business activities is instead
incurred by EOP Operating.
MANAGEMENT CONTROL
Management of EOP Operating is exclusively The business and affairs of Equity Office are
vested in Equity Office, as managing general managed under the direction of the Board of
partner. Equity Office has full power and Trustees. The policies adopted by the Board
authority to do all things it deems necessary of Trustees may be altered or eliminated
or desirable to conduct the business of EOP without a vote of the shareholders.
Operating, subject to the consent of certain Accordingly, except for their vote in the
of the limited partners in connection with elections of trustees, shareholders have no
actions that adversely affect such limited control over the ordinary business policies
partners and the consent of the holders of a of Equity Office. A trustee, other than a
majority of partnership interests in trustee elected by the holders of a class or
connection with the sale, exchange, transfer series of shares of beneficial interest other
or other disposition of all assets of EOP than common shares, may be removed only with
Operating through a merger, consolidation or cause by a majority vote of shareholders.
otherwise. Equity Office is under
</TABLE>
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EOP OPERATING EQUITY OFFICE
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no obligation to consider the tax
consequences to limited partners when making
decisions for the benefit of EOP Operating.
The limited partners have no power to remove
Equity Office as managing general partner.
FIDUCIARY DUTIES
Under Delaware law, Equity Office, as Under Maryland law, the trustees must perform
managing general partner, is required to their duties in good faith, in a manner that
exercise good faith and integrity in all they reasonably believe to be in the best
dealings with respect to partnership affairs. interests of Equity Office and with the care
Under EOP Operating's partnership agreement, of an ordinarily prudent person in a like
however, the limited partners expressly position. Trustees of Equity Office who act
acknowledge that Equity Office, as managing in such a manner generally will not be liable
general partner, is acting on behalf of EOP to Equity Office for monetary damages arising
Operating's limited partners and Equity from their activities.
Office's shareholders collectively. Equity
Office is under no obligation to consider the
tax consequences to, or the separate
interests of, the limited partners.
MANAGEMENT LIABILITY AND INDEMNIFICATION
Equity Office is not liable for monetary Equity Office is required by its bylaws to
damages for losses sustained, liabilities indemnify, to the maximum extent permitted by
incurred, or benefits not derived by the Maryland law, (a) any trustee, officer or
limited partners so long as it acts in good shareholder or any former trustee, officer or
faith. Equity Office's liability in any event shareholder (including any individual who,
is limited to its interest in EOP Operating. while a trustee, officer or shareholder and
EOP Operating has indemnified Equity Office at the express request of Equity Office,
and its trustees and officers, and such other serves or has served another corporation,
persons as Equity Office may from time to partnership, joint venture, trust, employee
time designate, to the fullest extent benefit plan or any other enterprise as a
provided by Delaware law, from and against director, officer, shareholder, partner or
any loss or damage, including legal fees and trustee of such corporation, partnership,
court costs incurred by such person by reason joint venture, trust, employee benefit plan
of anything it may do or refrain from doing or other enterprise) who has been successful,
for or on behalf of EOP Operating or in on the merits or otherwise, in the defense of
connection with its business or affairs a proceeding to which he was made a party by
unless it is established that (i) the act or reason of service in such capacity, against
omission of the indemnified person was reasonable expenses, incurred by him in
material to the matter giving rise to the connection with the proceeding or (b) any
proceeding and either was committed in bad trustee or officer or any former trustee or
faith or was the result of active and officer against any claim or liability to
deliberate dishonesty; (ii) such party which he may become subject by reason of such
received an improper personal benefit; or status.
(iii) in the case of any criminal proceeding,
such party had reasonable cause to believe
the act was unlawful. The reasonable expenses
incurred by an indemnified person may be
reimbursed by EOP Operating in advance of the
final disposition of the proceeding upon
receipt by EOP Operating of an affirmation by
the indemnified person of his, her or its
good faith belief that the standard of
conduct necessary for indemnification has
been met and an undertaking by such
indemnitee to repay the amount if it is
determined that such standard was not met.
</TABLE>
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EOP OPERATING EQUITY OFFICE
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ANTI-TAKEOVER PROVISIONS
Except as described below under "Voting The Declaration of Trust and bylaws of Equity
Rights," Equity Office has exclusive Office and Maryland corporate law contain
management power over the business and provisions that may have the effect of
affairs of EOP Operating. Equity Office may delaying or discouraging an unsolicited
not be removed by the limited partners. The proposal for the acquisition of Equity Office
partnership agreement prohibits limited or the removal of incumbent management. These
partners, without the prior written consent provisions include (i) the staggered terms of
of Equity Office, from transferring all or the Board of Trustees; (ii) authorized shares
any part of their interest in EOP Operating of beneficial interest that may be classified
except by operation of law, by gift or by and issued at the discretion of the Board of
sale, in each case to or for the benefit of a Trustees, including securities having
spouse or descendants, except for pledges or superior voting rights to the common shares;
other collateral transfers effected by a (iii) a requirement that trustees may be
limited partner to secure the repayment of a removed only for cause and only by a vote of
loan, the redemption of units, and the a majority of the outstanding common shares;
distribution of units by certain unit holders and (iv) provisions designed to avoid
to their constituent partners, shareholders, concentration of share ownership in a manner
members or partners or beneficiaries. Equity that would jeopardize Equity Office's REIT
Office cannot transfer its partnership status.
interests except in a transaction in which
substantially all of the assets of the
surviving entity consist of units. The
partnership agreement does not, however,
prevent a transaction in which another entity
acquires control of Equity Office and that
other entity owns assets and conducts
businesses outside EOP Operating.
VOTING RIGHTS
Limited partners have voting rights only as Holders of common shares are entitled to vote
to the dissolution of EOP Operating, the sale on the election and removal of trustees,
of all or substantially all of its assets and amendments of the Declaration of Trust, and
amendments to the partnership agreement. any proposal for the merger or consolidation,
Generally, Equity Office is entitled to vote or the sale or disposition of substantially
its interest in EOP Operating and controls all of the property, of Equity Office. Each
all decisions relating to the operation and holder of common shares is entitled to one
management of EOP Operating. As of September vote per share. Holders of common shares do
30, 1998, Equity Office owned approximately not have cumulative voting rights.
89.7% of the units. As units are redeemed by
partners, or if Equity Office acquires
additional units in exchange for the proceeds
of offerings of its securities, Equity
Office's percentage ownership of the units
will increase. If additional units are issued
to third parties, Equity Office's percentage
ownership of the units will decrease.
</TABLE>
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EOP OPERATING EQUITY OFFICE
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AMENDMENT OF THE PARTNERSHIP AGREEMENT OR THE DECLARATION OF TRUST
Amendments to the partnership agreement may The Declaration of Trust may be amended by a
be proposed by Equity Office or by limited majority vote of shareholders if the
partners owning at least 25% of the then amendment is in connection with a
outstanding units. Generally, the partnership transaction, approval of which requires by
agreement may be amended with the approval of law the affirmative vote of shareholders, and
Equity Office and limited partners (including pursuant to which Equity Office's business
Equity Office) holding a majority of the and assets will be combined with those of one
units. Certain provisions regarding, among or more entities by merger, sale or other
other things, the rights and duties of Equity transfer of assets, consolidation or share
Office as managing general partner or the exchange. Amendments not in connection with
dissolution of EOP Operating, may not be such business combination transactions
amended without the approval of a majority of require a vote of two-thirds of all of the
the units not held by Equity Office. votes entitled to be cast on the matter.
Amendments that would convert a limited Amendments to change the number of authorized
partner's interest into a general partner's common shares require the approval of holders
interest, modify the limited liability of a of a majority of all votes cast at a meeting
limited partner, alter the interest of a of shareholders at which a quorum is present,
partner in profits or losses or the rights to and, in certain cases, the approval of
receive any distribution, or alter the unit holders of two-thirds of the preferred shares
redemption right, must be approved by Equity outstanding at the time. The trustees, by a
Office and each limited partner that would be two-thirds vote, may amend the Declaration of
adversely affected by such amendment. Trust without the consent of shareholders as
necessary for Equity Office to qualify as a
REIT.
VOTE REQUIRED TO DISSOLVE EOP OPERATING OR EQUITY OFFICE
Through December 31, 2046, an election to Subject to the provisions of any class or
dissolve EOP Operating requires the consent series of shares of beneficial interest at
of limited partners (including Equity Office) the time outstanding, Equity Office may be
who hold 90% or more of the outstanding terminated and dissolved at any meeting of
units. After December 31, 2046, an election shareholders, by the affirmative vote of
to dissolve EOP Operating may be made by two-thirds of all the votes entitled to be
Equity Office, as managing general partner, cast on the matter.
in its sole and absolute discretion, without
the consent of the limited partners.
VOTE REQUIRED TO SELL ASSETS
Equity Office has the exclusive authority to Equity Office may sell, lease, exchange or
determine whether, when and on what terms the otherwise transfer all or substantially all
assets of EOP Operating will be sold. A sale of its property upon approval by the Board of
of all or substantially all of the assets of Trustees and, after notice to all
EOP Operating, or a merger of EOP Operating shareholders entitled to vote on the matter,
with another entity, generally requires an by the affirmative vote of not less than
affirmative vote of the holders of a majority two-thirds of all the votes entitled to be
of the outstanding units, including units cast on the matter. No approval of the
held by Equity Office. Equity Office expects shareholders is required for the sale of less
to always own, directly or indirectly, a than all or substantially all of Equity
majority of the units and thus to control the Office's assets.
outcome of such a vote.
VOTE REQUIRED TO MERGE
A merger of EOP Operating into another entity A merger of Equity Office must be approved by
generally requires an affirmative vote of the the affirmative vote of holders of not less
holders of a majority of the outstanding than a majority of the common shares then
units, including units held by Equity Office. outstanding and entitled to be cast on the
Equity Office expects to always own, directly matter and, in certain cases, by the
or indirectly, a majority of affirmative vote of holders of not less
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EOP OPERATING EQUITY OFFICE
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the units and thus to control the outcome of than two-thirds of the preferred shares then
such a vote. outstanding.
LIABILITY OF INVESTORS
No partner of EOP Operating is required to Under Maryland law, shareholders are not
make additional capital contributions to EOP personally liable for the debts or
Operating, except that Equity Office is obligations of Equity Office. All outstanding
required to contribute to EOP Operating the common shares are, and all common shares to
net proceeds of the sale of its common shares be issued pursuant to the unit redemption
and other equity interests. No limited or right will be, fully paid and nonassessable.
general partner is required to pay to EOP
Operating any deficit or negative balance
which may exist in its account.
REVIEW OF INVESTOR LISTS
Limited partners, upon written demand with a Under Maryland corporate law applicable to
statement of the purpose of such demand and Maryland real estate investment trusts, a
at the limited partner's expense, are shareholder holding at least 5% of the
entitled to obtain a current list of the name outstanding common shares of Equity Office
and last known address of each partner of EOP may upon written request inspect and copy
Operating. during usual business hours the list of the
shareholders.
</TABLE>
THE FOLLOWING COMPARES CERTAIN OF THE INVESTMENT ATTRIBUTES AND LEGAL
RIGHTS ASSOCIATED WITH THE OWNERSHIP OF UNITS AND SHARES OF BENEFICIAL INTEREST.
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UNITS SHARES OF BENEFICIAL INTEREST
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DISTRIBUTIONS
The units constitute equity interests Common shares constitute equity interests in
entitling each limited partner to his pro Equity Office. Equity Office is entitled to
rata share of cash distributions made to the receive its pro rata share of distributions
limited partners of EOP Operating. made by EOP Operating with respect to the
units, and each shareholder is entitled to
his pro rata share of any dividends or
distributions paid with respect to the common
shares. The distributions payable to the
shareholders are not fixed in amount and are
only paid if, when and as declared by the
Board of Trustees. In order to qualify as a
REIT, Equity Office must distribute at least
95% of its taxable income, excluding capital
gains. Any taxable income, including capital
gains, not distributed will be subject to
corporate income tax.
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UNITS SHARES
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LIQUIDITY
Limited partners are prohibited, without the The common shares are freely transferable,
prior written consent of Equity Office, which subject to the ownership limit contained in
may be withheld in its sole discretion, from the Declaration of Trust. The common shares
transferring all or any part of their are listed on the NYSE, and a public market
interest in EOP Operating except by operation for the common shares exists. The breadth and
of law, by gift or by sale, in each case to strength of this secondary market depends,
or for the benefit of a spouse or among other things, upon the number of shares
descendants, except for pledges or other outstanding and the number of shares
collateral transfers effected by a limited available for future sale, the extent of
partner to secure the repayment of a loan, institutional investor interest in Equity
the redemption of units, and the distribution Office, the reputation of REITs and office
of units by certain unit holders to their REITs generally and the attractiveness of
constituent partners, shareholders, members their equity securities in comparison to
or partners or beneficiaries. other equity securities, Equity Office's
financial performance, and general stock and
bond market conditions.
TAXATION
EOP Operating is not subject to federal Equity Office has elected to be taxed as a
income taxes. Instead, each holder of units REIT. So long as it qualifies as a REIT,
includes his allocable share of EOP Equity Office will be permitted to deduct
Operating's taxable income or loss in distributions paid to its shareholders, which
determining his individual federal income tax effectively will reduce the "double taxation"
liability. The maximum effective federal tax that typically results when a corporation
rate for individuals under current law is earns income and distributes that income to
39.6%. its shareholders in the form of dividends.
Equity Office's noncontrolled subsidiaries,
Income and loss from EOP Operating generally however, do not qualify as REITs and thus
are subject to the "passive activity" they are subject to federal income tax on
limitations. Under the "passive activity" their net income at normal corporate rates.
rules, income and loss from EOP Operating The maximum effective tax rate for
that is considered "passive income" generally corporations under current law is 35%.
can be offset against income and loss from
other investments that constitute "passive Distributions paid by Equity Office are
activities," unless EOP Operating is treated as "portfolio" income and cannot be
considered a "publicly traded partnership," offset with losses from "passive activities."
in which case income and loss from EOP
Operating can be offset only against other Distributions made by Equity Office to its
income and loss from EOP Operating. taxable domestic shareholders out of current
or accumulated earnings and profits are taken
Cash distributions from EOP Operating are not into account by them as ordinary income.
taxable to a holder of units except to the Distributions in excess of current or
extent they exceed such holder's basis in his accumulated earnings and profits that are not
interest in EOP Operating, which includes designated as capital gain dividends are
such holder's allocable share of EOP treated as a non-taxable return of basis to
Operating's debt. the extent of a shareholder's adjusted basis
in its common shares, with the excess taxed
Each year, holders of units receive a as capital gain. Distributions that are
Schedule K-1 tax form containing detailed tax designated as capital gain dividends
information for inclusion in preparing their generally are taxed as gains from the sale or
federal income tax returns. exchange of a capital asset held for more
than one year, to the extent they do not
Holders of units are required, in some cases, exceed Equity Office's actual net capital
to file state income tax returns and/or pay gain for the taxable year. For Equity
state income taxes in the states in which EOP Office's taxable years
Operating owns
</TABLE>
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UNITS SHARES
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property, even if they are not residents of commencing on or after January 1, 1998,
those states. Equity Office may elect to require its
shareholders to include Equity Office's
undistributed net capital gains in their
income. If Equity Office so elects,
shareholders would include their
proportionate share of such gains in their
income and be deemed to have paid their share
of the tax paid by Equity Office on such
gains. Each year, Shareholders will receive
Form 1099 used by corporations to report
dividends paid to their shareholders.
Shareholders who are individuals generally
are not required to file state income tax
returns and/or pay state income taxes outside
of their state of residence with respect to
Equity Office's operations and distributions.
Equity Office may be required to pay state
income taxes in certain states.
</TABLE>
14
<PAGE> 17
FEDERAL INCOME TAX CONSIDERATIONS
Recent Changes to Capital Gain Taxation. The Internal Revenue Service
Restructuring and Reform Act of 1998, which was signed into law on July 22,
1998, reduced the required holding period for the application of the 20% and 25%
capital gain tax rates for individuals, trusts and estates from more than 18
months to more than 12 months for sales of capital gain assets on or after
January 1, 1998. It is expected that the IRS will issue clarifying guidance
regarding the application of the new holding period requirement to capital gain
dividend designations by REITs.
PLAN OF DISTRIBUTION
This prospectus relates to the possible issuance from time to time by
Equity Office of up to 137,427 common shares if, and to the extent that, Equity
Office elects to issue such common shares to the holders of up to 137,427 units,
upon the tender of such units for redemption. Equity Office has registered the
issuance of the common shares to permit the holders thereof to sell such shares
without restriction in the open market or otherwise, but registration of the
issuance of such shares does not necessarily mean that any holders will elect to
redeem their units or that we will issue any common shares upon any redemption.
Equity Office will acquire one unit from an exchanging partner in exchange
for each common share that Equity Office issues. Consequently, with each
redemption, Equity Office's interest in EOP Operating will increase.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule appearing in our Annual Report on Form 10-K,
as amended by Form 10-K/A, for the year ended December 31, 1997 and the
statements of revenue and certain expenses for the Denver Post Tower, 301 Howard
Street and 215 Fremont Street, the Mountain Properties, Milennium Plaza, Polk &
Taylor, Colonnade I, Colonnade II and the Walker Building and Columbia Seafirst
Center appearing in our Current Report on Form 8-K dated June 26, 1998 as set
forth in their reports which are incorporated in this prospectus by reference.
Our consolidated financial statements and the statements of revenue and certain
expenses are incorporated by reference in reliance on their reports, given on
their authority as experts in accounting and auditing.
The consolidated financial statements of Beacon Properties Corporation,
appearing in the Current Report on Form 8-K/A of Equity Office Properties Trust
filed with the Commission on February 18, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
reports included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The legality of the common shares will be passed upon for Equity Office by
Hogan & Hartson L.L.P., Washington, D.C. Certain tax matters will be passed upon
by Hogan & Hartson L.L.P., Washington, D.C., special tax counsel to Equity
Office.
15
<PAGE> 18
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY EQUITY OFFICE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE COMMON SHARES IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF EQUITY OFFICE SINCE
THE DATE HEREOF.
------------------------
SUMMARY TABLE OF CONTENTS
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Summary................................ 2
Risk Factors........................... 3
About This Prospectus.................. 3
Where You Can Find More Information.... 3
Special Note Regarding Forward-Looking
Statements........................... 4
The Company............................ 5
Securities to be Offered............... 5
Redemption of Units.................... 5
EOP Operating -- Equity Office......... 8
Units -- Shares of Beneficial
Interest............................. 12
Federal Income Tax Considerations...... 15
Plan of Distribution................... 15
Experts................................ 15
Legal Matters.......................... 15
</TABLE>
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137,427 SHARES
EQUITY OFFICE
PROPERTIES TRUST
COMMON SHARES
OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)
------------------------
PROSPECTUS
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, 19
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<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated fees and expenses payable by
Equity Office in connection with the issuance and distribution of the securities
being registered:
<TABLE>
<S> <C>
Registration Fee.......................................... $ 932
Printing and Duplicating Expenses......................... 50,000
Legal Fees and Expenses................................... 50,000
Accounting Fees and Expenses.............................. 50,000
Miscellaneous............................................. 50,000
--------
Total................................................... $200,932
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Title 8 of the Corporations and Associations Article of the Annotated Code
of Maryland, as amended from time to time (the "Maryland REIT Law"), permits a
Maryland REIT to include in its declaration of trust a provision limiting the
liability of its trustees and officers to the trust and its shareholders for
money damages except for liability resulting from (a) actual receipt of an
improper benefit or profit in money, property or services or (b) active and
deliberate dishonesty established by a final judgment as being material to the
cause of action. Equity Office's declaration of trust, as amended from time to
time, and as filed with the State Department of Assessments and Taxation of
Maryland (the "Declaration of Trust"), contains such a provision which
eliminates such liability to the maximum extent permitted by the Maryland REIT
law.
The Declaration of Trust authorizes Equity Office, to the maximum extent
permitted by Maryland law, to obligate itself to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former trustee or officer or (b) any individual who, while a
trustee of Equity Office and at the request of Equity Office, serves or has
served as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise from and against any claim or liability to which such person
may become subject or which such person may incur by reason of his or her status
as a present or former trustee or officer of Equity Office. The Bylaws obligate
Equity Office, to the maximum extent permitted by Maryland law, to indemnify and
to pay or reimburse reasonable expenses in advance of final disposition of a
proceeding to (a) any present or former trustee or officer who is made party to
the proceeding by reason of his service in that capacity or (b) any individual
who, while a trustee or officer of Equity Office and at the request of Equity
Office, serves or has served another corporation, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a trustee, director,
officer or partner of such corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and who is made a party to the
proceeding by reason of his service in that capacity, against any claim or
liability to which he may become subject by reason of such status. The
Declaration of Trust and Bylaws also permit Equity Office to indemnify and
advance expenses to any person who served a predecessor of Equity Office in any
of the capacities described above and to any employee or agent of Equity Office
or a predecessor of Equity Office. The Bylaws require Equity Office to indemnify
a trustee or officer (or any former trustee or officer) who has been successful,
on the merits or otherwise, in the defense of any proceeding to which he is made
a party by reason of his service in that capacity against reasonable expenses
incurred in connection with the proceeding.
The Maryland REIT Law permits a Maryland REIT to indemnify and advance
expenses to its trustees, officers, employees and agents to the same extent as
permitted by the Maryland General Corporation Law, as amended from time to time
(the "MGCL"), for directors and officers of Maryland
II-1
<PAGE> 20
corporations. The MGCL permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their service in
those or other capacities unless it is established that (a) the act or omission
of the director or officer was material to the matter giving rise to the
proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) the director or officer actually received an
improper personal benefit in money, property or services or (c) in the case of
any criminal proceeding, the director or officer had reasonable cause to believe
that the act or omission was unlawful. The foregoing limitations on
indemnification are expressly set forth in the Bylaws. However, under the MGCL,
a Maryland corporation may not indemnify for any adverse judgment in a suit by
or in the right of the corporation or for a judgment of liability on the basis
that a personal benefit was improperly received, unless, in either case, a court
orders indemnification and then only for expenses. Under the MGCL, as a
condition to advancing expenses, as required by the Bylaws, Equity Office must
first receive (a) a written affirmation by the trustee or officer of his good
faith belief that he has met the standard of conduct necessary for
indemnification by Equity Office and (b) a written undertaking by or on his
behalf to repay the amount paid or reimbursed by Equity Office if it shall
ultimately be determined that the standard of conduct was not met. In addition,
Mr. Dobrowski will be indemnified by General Motors Investment Management
Corporation ("GMIMCO") and will be covered by an insurance policy maintained by
General Motors Corporation, of which GMIMCO is a subsidiary, in connection with
serving on the Board.
The limited partnership agreement of EOP Operating (the "Partnership
Agreement") also provides for indemnification of Equity Office and its officers
and trustees to the same extent that indemnification is provided to officers and
trustees of Equity Office in its Declaration of Trust, and limits the liability
of Equity Office and its officers and trustees to EOP Operating and its
respective partners to the same extent that the Declaration of Trust limits the
liability of the officers and trustees of Equity Office to Equity Office and its
shareholders.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to trustees, officers or persons controlling Equity Office
pursuant to the foregoing provisions, Equity Office has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
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<PAGE> 21
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
4.1* Articles of Amendment and Restatement of Declaration of
Trust of the Company
4.2** By-laws of the Company
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the securities being registered
8.1 Opinion of Hogan & Hartson L.L.P. regarding certain tax
matters
12.1*** Statement of Computation of Ratios
23.1 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 5.1)
23.2 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 8.1)
23.3 Consent of Ernst & Young LLP
23.4 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in signature page)
</TABLE>
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* Incorporated herein by reference to the same-numbered exhibit to the
Company's Registration Statement on Form S-11 (Reg. No. 333-26629).
** Incorporated herein by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-4 (Reg. No. 333-40401-01).
*** Incorporated herein by reference to the same-numbered exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 1997,
as amended.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in this
registration statement;
provided, however, that subparagraphs (i) and (ii) above shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 22
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to existing provisions or arrangements whereby the
Registrant may indemnify a director, officer or controlling person of the
Registrant against liabilities arising under the Securities Act of 1933, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable ground to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Chicago, Illinois on this 23rd day of December, 1998.
EQUITY OFFICE PROPERTIES TRUST
/s/ TIMOTHY H. CALLAHAN
By:
--------------------------------------
Timothy H. Callahan
President and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned trustees and officers of Equity Office Properties
Trust, do hereby constitute and appoint Stanley M. Stevens and Timothy H.
Callahan and each and either of them, our true and lawful attorneys-in-fact and
agents, to do any and all acts and things in our names and our behalf in our
capacities as trustees and officers and to execute any and all instruments for
us and in our name in the capacities indicated below, which said attorneys and
agents, or either of them, may deem necessary or advisable to enable said Trust
to comply with the Securities Act of 1933 and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
registration statement, or any registration statement for this offering that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, including specifically, but without limitation, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of the 23rd day of December, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ TIMOTHY H. CALLAHAN President, Chief Executive Officer and Trustee
- ---------------------------------------------
Timothy H. Callahan
/s/ RICHARD D. KINCAID Chief Financial Officer (principal financial
- --------------------------------------------- officer and principal accounting officer)
Richard D. Kincaid
/s/ SAMUEL ZELL Chairman of the Board and Trustee
- ---------------------------------------------
Samuel Zell
/s/ SHELI Z. ROSENBERG Trustee
- ---------------------------------------------
Sheli Z. Rosenberg
/s/ THOMAS E. DOBROWSKI Trustee
- ---------------------------------------------
Thomas E. Dobrowski
/s/ JAMES D. HARPER, JR. Trustee
- ---------------------------------------------
James D. Harper, Jr.
</TABLE>
II-5
<PAGE> 24
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JERRY M. REINSDORF Trustee
- ---------------------------------------------
Jerry M. Reinsdorf
/s/ WILLIAM M. GOODYEAR Trustee
- ---------------------------------------------
William M. Goodyear
/s/ DAVID K. MCKOWN Trustee
- ---------------------------------------------
David K. McKown
/s/ H. JON RUNSTAD Trustee
- ---------------------------------------------
H. Jon Runstad
/s/ EDWIN N. SIDMAN Trustee
- ---------------------------------------------
Edwin N. Sidman
Trustee
- ---------------------------------------------
D. J. A. de Bock
</TABLE>
II-6
<PAGE> 25
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S>
4.1* Articles of Amendment and Restatement of Declaration of
Trust of the Company
4.2** By-laws of the Company
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the securities being registered
8.1 Opinion of Hogan & Hartson L.L.P. regarding certain tax
matters
12.1*** Statement of Computation of Ratios
23.1 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 5.1)
23.2 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 8.1)
23.3 Consent of Ernst & Young LLP
23.4 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in signature page)
</TABLE>
- -------------------------
* Incorporated herein by reference to the same-numbered exhibit to the
Company's Registration Statement on Form S-11 (Reg. No. 333-26629).
** Incorporated herein by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-4 (Reg. No. 333-40401-01).
*** Incorporated herein by reference to the same-numbered exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 1997,
as amended.
II-7
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
December 23, 1998
Equity Office Properties Trust
EOP Operating Limited Partnership
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Dear Ladies and Gentlemen:
We are acting as counsel to Equity Office Properties Trust, a Maryland
real estate investment trust (the "COMPANY"), in connection with its
registration statement on Form S-3 (the "REGISTRATION STATEMENT") relating to
the proposed public offering of up to 137,427 of the Company's common shares of
beneficial interest, par value $.01 per share, all of which shares (the
"SHARES") are to be issued by the Company from time to time as set forth in the
prospectus which forms a part of the Registration Statement. This opinion letter
is furnished to you at your request to enable you to fulfill the requirements of
Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section 229.601(b)(5), in connection
with the Registration Statement.
We assume that the issuance of the Shares to be offered from time to
time will be duly authorized by proper action of the Board of Trustees of the
Company consistent with the description in the Registration Statement (each, a
"BOARD ACTION") and in accordance with the Company's Articles of Amendment and
Restatement of Declaration of Trust (the "DECLARATION OF TRUST") and applicable
Maryland law.
For purposes of the opinions expressed in this letter, we have
examined copies of the following documents:
1. An executed copy of the Registration Statement.
<PAGE> 2
EOP Operating Limited Partnership
December 22, 1998
Page 2
2. The Certificate of Limited Partnership of the Operating
Partnership, as certified by the Secretary of State of the State
of Delaware on November 25, 1998, and by the Assistant Secretary
of the Company, as managing general partner of the Operating
Partnership, on the date hereof as then being complete, accurate
and in effect.
3. The Agreement of Limited Partnership of the Operating
Partnership, as certified by the Assistant Secretary of the
Company, as managing general partner of the Operating
Partnership, on the date hereof as then being complete, accurate
and in effect.
4. The Declaration of Trust, as certified by the Maryland State
Department of Assessments and Taxation on November 30, 1998, and
by the Assistant Secretary of the Company on the date hereof as
then being complete, accurate and in effect.
5. The Bylaws of the Company, as certified by the Assistant
Secretary of the Company on the date hereof as then being
complete, accurate and in effect.
6. Certain resolutions of the Board of Trustees of the Company
adopted on November 13, 1997, as certified by the Assistant
Secretary of the Company on the date hereof as then being
complete, accurate and in effect, relating to the issuance and
sale of the Shares and arrangements in connection therewith.
In our examination of the aforesaid certificates, documents and
agreements, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the accuracy and completeness of all documents
submitted to us, the authenticity of all original documents and the conformity
to authentic original documents of all documents submitted to us as copies
(including telecopies). We also have assumed the authenticity, accuracy and
completeness of the foregoing certifications (of public officials and corporate
officers) and statements of fact, on which we are relying, and have made no
independent investigations thereof. This opinion letter is given, and all
statements herein are made, in the context of the foregoing.
<PAGE> 3
EOP Operating Limited Partnership
December 22, 1998
Page 3
This opinion letter is based as to matters of law solely on Title 8 of
the Corporations and Associations Article of the Annotated Code of Maryland and
Maryland contract law. We express no opinion herein as to any other laws,
statutes, ordinances, rules or regulations.
Based upon, subject to and limited by the foregoing, we are of the
opinion that, as of the date hereof, when the Registration Statement has become
effective under the Securities Act of 1933, as amended, upon due authorization
by Board Action of an issuance of Shares, and upon issuance and delivery of such
Shares against payment therefor in accordance with the terms of such Board
Action, and as contemplated by the Registration Statement, such Shares will be
validly issued, fully paid and non-assessable.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing of the Registration
Statement on the date of this opinion letter and should not be quoted in whole
or in part or otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ HOGAN & HARTSON L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE> 1
EXHIBIT 8.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
December 23, 1998
Equity Office Properties Trust
Two North Riverside Plaza
Chicago, Illinois 60606
Ladies and Gentlemen:
We have acted as special tax counsel to Equity Office Properties Trust
(the "Company"), a Maryland real estate investment trust, in connection with the
registration by the Company of up to 137,427 Common Shares of beneficial
interest, par value $.01 per share, (the "Redemption Shares") which may be
issued to holders of up to 137,427 Class A units of limited partnership interest
("Units") in EOP Operating Limited Partnership (the "Operating Partnership"), as
more fully described in the Company's Registration Statement on Form S-3 No.
filed with the Securities and Exchange Commission on or about the date hereof
(the "Registration Statement," which includes the "Prospectus"). In connection
with such registration, we have been asked to provide you with an opinion
regarding certain federal income tax matters related to the Company. Unless
otherwise defined herein or the context hereof otherwise requires, each term
used herein with initial capitalized letters has the meaning given to such term
in the Prospectus.
BASES FOR OPINIONS
The opinions set forth in this letter are based on relevant current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations thereunder (including proposed and temporary Treasury
Regulations), and interpretations of the foregoing as expressed in court
decisions, legislative history, and administrative determinations of the
Internal Revenue Service (the "IRS") (including its practices and policies in
issuing private letter rulings, which are not binding on the IRS, except with
respect to a taxpayer that receives such a ruling), all as of the date hereof.
These provisions and interpretations are subject to
<PAGE> 2
Equity Office Properties Trust
December 23, 1998
Page 2
changes, which may or may not be retroactive in effect, that might result in
material modifications of our opinions. Our opinion does not foreclose the
possibility of a contrary determination by the IRS or a court of competent
jurisdiction or of a contrary position by the IRS or the Treasury Department in
regulations or rulings issued in the future. In this regard, although we believe
that our opinions set forth herein will be sustained if challenged, an opinion
of counsel with respect to an issue is not binding on the IRS or the courts, and
is not a guarantee that the IRS will not assert a contrary position with respect
to such issue or that a court will not sustain such a position asserted by the
IRS.
In rendering the following opinions, we have examined such statutes,
regulations, records, certificates and other documents as we have considered
necessary or appropriate as a basis for such opinions, including the following:
(1) the Prospectus and the Company's Annual Report on Form 10-K, as amended, for
the fiscal year ended December 31, 1997, as incorporated by reference in the
Prospectus; (2) the Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, dated as of July 3, 1997, as amended to the date hereof;
(3) the Articles of Amendment and Restatement of Declaration of Trust of the
Company dated as of July 8, 1997, as amended to the date hereof (the
"Declaration of Trust") and, with respect to each series of Preferred Shares of
the Company, the Articles Supplementary establishing and fixing the rights and
preferences of such series of preferred shares; (4) the agreements of limited
partnership, as amended to the date hereof, of each of the Opportunity
Partnerships; (5) the form of partnership agreement or limited liability company
operating agreement, as applicable, used by Operating Partnership and/or the
Opportunity Partnerships to organize and operate the partnerships and limited
liability companies in which one or more of the Opportunity Partnerships owns an
interest (collectively, the "Partnership Subsidiaries"); (6) the articles of
organization and stock ownership records of each corporation in which one or
more of the Operating Partnership or the Opportunity Partnerships owns stock,
directly or indirectly, including BeaMetFed, Inc., Equity Office Properties
Management Corp., EOP Office Company, Beacon Properties Management Corporation,
Beacon Design Corporation and Beacon Construction Company, Inc. (collectively,
the "Corporate Entities"); (7) stock ownership information for Tenant Services
Corp.; and (8) other necessary documents as we have deemed necessary in order to
render the opinions set forth in this letter. The opinions set forth in this
letter also are premised on certain written representations of (i) each of the
ZML REITs and each of the Opportunity Partnerships contained in a letter to us
dated July 7, 1997, which letter was reconfirmed to us by the Company, as the
successor to the ZML REITs, on December 8, 1998, regarding the
<PAGE> 3
Equity Office Properties Trust
December 23, 1998
Page 3
assets, operations and activities of each of the ZML REITs prior to July 11,
1997 and (ii) the Company and the Operating Partnership contained in a letter to
us dated, on December 8, 1998, regarding the assets, operations and activities
of the Company and the Operating Partnership in the past and as to the
contemplated assets, operations and activities of the Company in the future
(collectively, the "Management Representation Letters").
For purposes of rendering our opinion, we have not made an independent
investigation or audit of the facts set forth in any of the above-referenced
documents, including the Management Representation Letters. We consequently have
relied upon representations in the Management Representation Letters that the
information presented in such documents or otherwise furnished to us is accurate
and complete in all material respects. We are not, however, aware of any
material facts or circumstances contrary to, or inconsistent with, the
representations we have relied upon as described herein or other assumptions set
forth herein.
Moreover, we have assumed that, insofar as relevant to the opinions
set forth herein, (1) each of the Company, the Operating Partnership, the
Opportunity Partnerships, the Partnership Subsidiaries, and the Corporate
Entities in which an Opportunity Partnership owns an interest has been and will
be operated in the manner described in the Registration Statement and in the
relevant partnership agreement, articles (or certificate) of incorporation,
declaration of trust or other organizational documents; (2) as represented by
the Company, there are no agreements or understandings between (a) the Company
or the Operating Partnership and (b) either (i) Equity Office Holdings L.L.C.,
the entity that owns 100% of the voting stock of Equity Office Properties
Management Corp. and EOP Office Company, or with such corporations themselves,
that are inconsistent, or will be inconsistent, with Equity Office Holdings
L.L.C. being considered to be both the record and beneficial owner of 100% of
the outstanding voting stock of Equity Office Properties Management Corp. and
EOP Office Company, or (ii) Equity Office Properties Management Corp., the
entity that owns 100% of the voting stock of Beacon Construction Company, Inc.;
(3) as represented by the Company, the Company will take measures to ensure that
any services provided to tenants of the Properties by Tenant Services Corp.
either (a) will be considered "usually or customarily rendered" or (b) will, for
any taxable years beginning January 1, 1998, satisfy the de minimis test under
Section 856(d)(7) of the Code taking into account all other "impermissible
services" provided to a particular property; (4) as represented by the Company,
the Company will take measures to insure that any
<PAGE> 4
Equity Office Properties Trust
December 23, 1998
Page 4
other services provided to the tenants of the Properties will be either (a)
"usually or customarily rendered" or (b) provided by an entity that qualifies as
an "independent contractor" as defined in Section 856 of the Code and the
Treasury Regulations thereunder from which the Company receives no income, and
the following conditions are satisfied: the tenants are separately charged by
the independent contractor, the relationship between the independent contractor
and the Company is arm's length, and, for noncustomary services, the cost of the
services are borne by the independent contractor; and (5) the Company is a
validly organized and duly incorporated real estate investment trust under the
laws of the State of Maryland, each of the Corporate Entities is a validly
organized and duly incorporated corporation under the laws of the state in which
it is purported to be organized, Operating Partnership is a duly organized and
validly existing limited partnership under the laws of the State of Delaware,
each of the Opportunity Partnerships is a duly organized and validly existing
limited partnership under the laws of the State of Illinois, and each of the
Partnership Subsidiaries is a duly organized and validly existing partnership or
limited liability company, as the case may be, under the applicable laws of the
state in which it is purported to be organized.
In our review, we have assumed, with your consent, that all of the
representations and statements set forth in the documents that we reviewed
(including the Management Representation Letters) are true and correct, and all
of the obligations imposed by any such documents on the parties thereto,
including obligations imposed under the Declaration of Trust, have been and will
continue to be performed or satisfied in accordance with their terms. We also
have assumed the genuineness of all signatures, the proper execution of all
documents, the authenticity of all documents submitted to us as originals, the
conformity to originals of documents submitted to us as copies, and the
authenticity of the originals from which any copies were made.
OPINIONS
Based upon, subject to, and limited by the assumptions and
qualifications set forth herein, we are of the opinion that:
1. the Company is organized, as of the date hereof, in conformity
with the requirements for qualification and taxation as a real estate investment
trust ("REIT") under the Code, and the Company's proposed method of operation
(as described in the Prospectus and the Management Representation Letters) will
enable the Company to continue to meet the requirements for qualification and
<PAGE> 5
Equity Office Properties Trust
December 23, 1998
Page 5
taxation as a REIT for the taxable year ending December 31, 1998, and for
subsequent taxable years; and
2. the discussions in the Prospectus and in the Company's Annual
Report on Form 10-K, as amended, for the fiscal year ended December 31, 1997, as
incorporated by reference in the Prospectus, under the captions "Federal Income
Tax Considerations" and "Redemption of Units -- Tax Consequences of Redemption,"
to the extent that they discuss matters of law or legal conclusions or purport
to describe certain provisions of the federal tax laws, are correct summaries of
the matters discussed therein as of the date hereof.
We assume no obligation to advise you of any changes in our opinion or
of any new developments in the application or interpretation of the federal
income tax laws subsequent to the date of this letter. The Company's
qualification and taxation as a REIT depend upon both (i) the satisfaction in
the past by Beacon and the ZML REITs of the requirements for qualification and
taxation as a REIT; (ii) the Company's ability to meet on a continuing basis,
through actual annual operating and other results, the various requirements
under the Code, as described in the Prospectus with regard to, among other
things, the sources of its gross income, the composition of its assets, the
level of its distributions to shareholders, and the diversity of its stock
ownership; and (iii) the satisfaction, at all time since the Company has owned
an interest in BeaMetFed, Inc. and on a continuing basis, by BeaMetFed, Inc. of
the requirements for qualification and taxation as a REIT. Hogan & Hartson
L.L.P. will not review the Company's compliance with these requirements on a
continuing basis. Accordingly, no assurance can be given that the actual results
of the Company's operations, the sources of its income, the nature of its
assets, the level of its distributions to shareholders and the diversity of its
share ownership for any given taxable year will satisfy the requirements under
the Code for qualification and taxation as a REIT.
In rendering the opinions herein, Hogan & Hartson L.L.P. has relied
upon representations of the Company and the Operating Partnership with respect
to REIT qualification matters, including those set forth in the Management
Representation Letters. In addition, Hogan & Hartson L.L.P. has relied upon the
representations of the Company and the Operating Partnership regarding the
qualification of BeaMetFed, Inc. as a REIT.
This letter has been prepared solely for your use in connection with
the filing of the Registration Statement and should not be quoted in whole or in
part or otherwise referred to, or be filed with or furnished to any governmental
agency or
<PAGE> 6
Equity Office Properties Trust
December 23, 1998
Page 6
other person, without the prior written consent of this firm. We hereby consent
to the filing of this opinion letter as Exhibit 8.1 to the Registration
Statement and to the reference to Hogan & Hartson L.L.P. under the caption
"Legal Matters" in the Prospectus. In giving this consent, we do not thereby
admit that we are an "expert" within the meaning of the Securities Act of 1933,
as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
Hogan & Hartson L.L.P.
<PAGE> 1
EXHIBIT 23.3
We consent to the reference to our firm under the caption "Experts" in to the
Registration Statement (Form S-3) and related Prospectus of Equity Office
Properties Trust for the registration of common shares of beneficial interest
and to the incorporation by reference therein of our reports indicated below
with respect to the financial statements indicated below included in Equity
Office Properties Trust's filings as indicated below, filed with the Securities
and Exchange Commission.
Financial Statements Date of Auditors' Report
-------------------- ------------------------
Consolidated financial statements of Equity February 23, 1998, except
Office Properties Trust included in its Annual for Note 25, as to which the
Report (Form 10-K, as amended by Form 10-K/A) date is March 18, 1998
for the year ended December 31, 1997
The following reports are included in the
Current Report of Equity Office Properties
Trust on Form 8-K dated June 26, 1998:
Statement of Revenue and Certain Expenses of
Denver Post Tower for the year ended
December 31, 1997 April 28, 1998
Combined Statement of Revenue and Certain
Expenses 301 Howard Street and 215 Fremont
Street for the year ended October 31, 1997 April 29, 1998
Combined Statement of Revenue and Certain
Expenses of the Mountain Properties for the
year ended December 31, 1997 April 28, 1998
Statement of Revenue and Certain Expenses of
Millennium Plaza for the year ended
December 31, 1997 June 22, 1998
Statement of Revenue and Certain Expenses of
Polk & Taylor for the year ended
December 31, 1997 June 18, 1998
Combined Statement of Revenue and Certain
Expenses of Colonnade I, Colonnade II, and the
Walker Building for the year ended
December 31, 1997 June 12, 1998
Statement of Revenue and Certain Expenses of
Columbia Seafirst Center for the year ended
December 31, 1997 July 1, 1998
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Chicago Illinois
December 22,1998
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Equity Office Properties Trust on Form S-3 of our reports dated January 28,
1997, on our audits of the financial statements and financial statement
schedules of Beacon Properties Corporation, which reports were filed with the
Securities and Exchange Commission on the Form 8-K/A of Equity Office Properties
Trust on February 18, 1998. We also consent to the reference to our firm under
the caption "Experts."
/S/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 22, 1998
